LAW AND DEVELOPMENT IN EAST AND SOUTHEAST ASIA During the 1980s and 1990s Asian ‘developmental states’ attracted much attention in political science and economics literature, but the role of law in their economic development was neglected. It was only after the Asian crisis of 1997 that many analysts began to focus on a lack of regulation and transparency as a major factor triggering the crisis. As a result, international financial institutions now tend to make further financial support for Asian economies dependent on improvements of the legal framework in which businesses operate. The crucial questions now are how successful the current reforms will be, and which features of the Asian approach to commercial law will be resistant to reform pressures. This book examines the prospects for commercial law reform in Asia. Japan and Singapore, as frequently cited role models for Asian developmentalism, receive particular attention. Development related business laws in countries such as China, Korea, Indonesia, Malaysia, Vietnam and the Philippines are also examined. The book includes chapters on individual fields of commercial law such as intellectual property law, financial market regulation and labour law as well as chapters that explain the socio-legal background of Asian legal development. All are placed into the industrial policy framework of the countries concerned. Christoph Antons is Senior Lecturer in the Faculty of Law and Centre for Southeast Asian Law at the Northern Territory University, Darwin, Australia. RoutledgeCurzon-IIAS Asian Studies Series Series Co-ordinator: Dick van der Meij Institute Director: Wim A.L.Stokhof The International Institute for Asian Studies (IIAS) is a postdoctoral research centre based in Leiden and Amsterdam, The Netherlands. Its main objective is to encourage Asian Studies in the Humanities and the Social Sciences and to promote national and international co-operation in these fields. The Institute was established in 1993 on the initiative of the Royal Netherlands Academy of Arts and Sciences, Leiden University, Universiteit van Amsterdam and Vrije Universiteit Amsterdam. It is mainly financed by The Netherlands Ministry of Education, Culture, and Sciences. IIAS has played an active role in co-ordinating and disseminating information on Asian Studies throughout the world. The Institute acts as an international mediator, bringing together various entities for the enhancement of Asian Studies both within and outside The Netherlands. The RoutledgeCurzon-IIAS Asian Studies series reflects the scope of the Institute. The Editorial Board consists of Erik Zurcher, Wang Gungwu, Om Prakash, Dru Gladney, Amiya K.Bagchi, James C.Scott, Jean-Luc Domenach and Frits Staal. Images of the ‘Modern Woman’ in Asia Edited by Shoma Munshi Nomads in the Sedentary World Edited by Anatoly M.Khazanov & Andre Wink Reading Asia Edited by Frans Husken & Dick van der Meij Tourism, Heritage and National Culture in Java Heidi Dahles Asian-European Perspectives Edited by Wim Stokhof & Paul van der Velde Law and Development in East and Southeast Asia Edited by Christoph Antons The Indian Ocean Rim Edited by Gwyn Campbell Rethinking Chinese Transnational Enterprises Edited by Leo Douw, Cen Huang & David Ip ‘Hinduism’ in Modern Indonesia Edited by Martin Ramstedt Indonesian Sea Nomads Cynthia Chou Diasporas and Interculturalism in Asian Performing Arts Edited by Hae-Kyung Um Reading East Asian Writing Edited by Michel Hockx & Ivo Smits LAW AND DEVELOPMENT IN EAST AND SOUTHEAST ASIA EDITED BY Christoph Antons LONDON AND NEW YORK First published 2003 by RoutledgeCurzon 11 New Fetter Lane, London EC4P 4EE Simultaneously published in the USA and Canada by RoutledgeCurzon 29 West 35th Street, New York, NY 10001 RoutledgeCurzon is an imprint of the Taylor & Francis Group This edition published in the Taylor & Francis e-Library, 2005. “To purchase your own copy of this or any of Taylor & Francis or Routledge’s collection of thousands of eBooks please go to http://www.ebookstore.tandf.co.uk/.” © 2003 Editorial matter and selection, Christoph Antons All rights reserved. No part of this book may be reprinted or reproduced or utilised in any form or by any electronic, mechanical, or other means, now known or hereafter invented, including photocopying and recording, or in any information storage or retrieval system, without permission in writing from the publishers. British Library Cataloguing in Publication Data A catalogue record for this book is available from the British Library Library of Congress Cataloging in Publication Data A catalogue record for this book has been requested ISBN 0-203-98894-9 Master e-book ISBN ISBN 0-700-71321-2 (Print Edition) TABLE OF CONTENTS Contributors ix Preface x 1 PART ONE: PARADIGMS OF LAW AND DEVELOPMENT IN ASIA 1 Introduction 2 Christoph Antons 2 Law and Development from the Southeast Asian Perspective: Methodology, 19 History, and Paradigm Change Nobuyuki Yasuda 3 APEC, Industry Policy, and the Role of Law 52 Bernard G.Bishop 4 The Rule of Law, Economic Development, and the Developmental States of 70 Northeast Asia John K.M.Ohnesorge 99 PART TWO: JAPAN AS A MODEL FOR LAW AND DEVELOPMENT IN ASIA 5 Globalization vs. Paternalistic Regulation: Some Thoughts about Economic 100 Success, the Role of Law, and the Regulation of Japan’s Financial Markets Harald Baum 6 The Rule of Law or Law as Instrument of Rule? Law and the Economic 118 Development of Japan with Particular Regard to Industrial Policy Richard Boyd 7 Industrial Policy and Intellectual Property in Japan and Beyond 151 Christopher Heath 8 Japan as a Model? Comparing Law and Development in Japan, Singapore, 166 and Indonesia Christoph Antons 192 PART THREE: LAW IN A ‘SOCIALIST MARKET ECONOMY’: THE CASE OF CHINA 9 Policy as Law and Law as Policy: The Role of Law in China’s Development 193 Strategy Jianfu Chen 10 The Clonability of the Singapore Model of Law and Development: The Case 208 of Suzhou, China Connie Carter 221 PART FOUR: SOUTHEAST ASIAN APPROACHES TO LAW AND DEVELOPMENT 11 Prosperity at a Price: Regulation of Organized Labour in Malaysia 222 Jesse Wu Min Aun 12 The Legal Regulation of Technology Transfer: Arrangements within ASEAN 243 Michael Blakeney 261 PART FIVE: LAW AND DEVELOPMENT AND ‘THE REGION’ 13 Resolving Trade Disputes in Asia: An Essay about the Laws, Institutions, 262 and Cultures Robert E.Lutz 14 Asian Economic Crisis and Legal Institutions: A Tale of Two Cities 278 Roman Tomasic CONTRIBUTORS CHRISTOPH ANTONS is a Senior Lecturer in the School of Law and Director of the Centre for Southeast Asian Law, Northern Territory University, Darwin, Australia. HARALD BAUM is a Senior Research Fellow at the Max Planck Institute for Foreign and International Private Law, Hamburg, Germany. BERNARD G.BISHOP is a Senior Lecturer in the Faculty of International Business and Politics, Griffith University, Brisbane, Australia. MICHAEL BLAKENEY is Professor and Director of the Queen Mary Intellectual Property Institute, Queen Mary and Westfield College, University of London, United Kingdom. RICHARD BOYD is Reader in law and society with respect to Japan in the Department of Languages and Cultures of Japan and Korea, Faculty of Arts, Leiden University, the Netherlands. CONNIE CARTER is a Barrister and a Visiting Lecturer at the School of African and Oriental Studies, University of London, United Kingdom. JIANFU CHEN is Associate Professor and Reader in the School of Law and Legal Studies, La Trobe University, Melbourne, Australia. CHRISTOPHER HEATH is a Senior Research Fellow and Head of the East and Southeast Asia Department at the Max Planck Institute for Foreign and International Patent, Copyright and Competition Law in Munich, Germany. ROBERT E.LUTZ is Professor in the School of Law, Southwestern University, Los Angeles, USA. JOHN K.M.OHNESORGE is Assistant Professor in the School of Law, University of Wisconsin, Madison, USA. ROMAN TOMASIC is Professor and Dean, Faculty of Law and Business, Victoria University, Melbourne, Australia. JESSE WU MIN AUN is Professor in the School of Law, Northern Territory University, Darwin, Australia. NOBUYUKI YASUDA is Professor in the Graduate School of International Development, Nagoya University, Japan. PREFACE This books results from a workshop held at the International Institute for Asian Studies (IIAS) in Leiden, the Netherlands, in January 1998. Ten of the fourteen papers in this book were originally presented at the workshop, but due to the rapidly changing legal environment in the countries covered, most of the papers had to be revised during 1999 and 2000. The workshop was funded by a generous grant of the International Institute for Asian Studies and supported by smaller grants of the Van Vollenhoven Institute for Law and Administration in Non-Western Countries of Leiden University, and Kluwer Law International. At the IIAS, I would like to thank in particular its Director Professor W.A.L.Stokhof, for his continuing encouragement and support for this project and Dr Dick van der Meij for the excellent final editing of the papers for publication. Thanks also to Ms Marianne Langehenkel for organizing the workshop and making it such a pleasant event. I would further like to thank the director of the Van Vollenhoven Institute, Professor Jan-Michiel Otto, for supporting the workshop and suggesting some of the speakers. Many thanks are further due to Professor Martin Chanock, who was head of the school of law and legal studies at La Trobe University in Melbourne at the time, for allowing me to prolong my research stay in Europe for the workshop. The concept of the workshop was based on my project ‘Japan as a Model?—Law and Development in Japan, Singapore, and Indonesia’, which was funded by a large grant of the Australian Research Council from 1994 to 1996. My stay in the Netherlands in 1997 and early 1998 was made possible by an outside study grant of La Trobe University and an exchange fellowship of the Research School of Pacific Studies at the Australian National University in Canberra.